Second-tier luxury auto brands see polarized sales volume in 2017

Feb. 1 (NBD) -- Cadillac in 2017 became the top seller among second-tier luxury brands in China with a sales volume of 175,000 cars, up 50.80 percent year on year.

The second place went to Jaguar Land Rover which sold 146,000 units, representing a 23 percent increase compared with the previous year.

All eight second-tier brands, except Porsche and Infiniti, saw their sales volume in China rise by over 20 percent.

NBD noticed that second-line luxury automobile brands chose to cut down prices to push up their sales, which resulted in the polarized sales volume within this group.

To date, in the second-line luxury group, four brands - Cadillac, Jaguar Land Rover, Lexus and Volvo - all have achieved the yearly sales volume of more than 100,000 units in Chinese market.

However, the difference of sales volume between Cadillac and its nearest competitor Jaguar Land Rover stood at 30,000 units, and the gap between Cadillac and the fourth-placed Volvo reached 60,000 units.

The widening sales gap was related to the policy of price reduction in exchange for sales increase adopted by some carmakers.

Upon visits, NBD learned that the mid-life facelifts of the Cadillac XTS are being offered with a discount of 30,000 yuan (4,758.5 U.S. dollars) while XT5 models come with a discount of 50,000 yuan (7,930.8 U.S. dollars).

Sales personnel at a Cadillac 4S store in Beijing introduced to NBD that ATS-L models enjoyed the best discounts of as much as 80,000 yuan (12,689.3 U.S. dollars).

In fact, Cadillac is not the only one which entered the "price war". Through the investigation, NBD found that the sales price of the Land Rover Discovery was 100,000 yuan (15,861.7 U.S. dollars) at least lower than its guide price while the sales price of the Cadillac ES models went down to 250,000 yuan (39,654.2 U.S. dollars) despite its guide price of 298,000 yuan (47,267.8 U.S. dollars).

As China's consumption upgrade accelerates and automobile price continues to drop, some customers eye luxury cars, which will likely help expand the market share of luxury brands.

Everything has two sides. The substantial price reduction will inevitably compromise the brand influence, and the chaotic sales prices will cause competition among different models under the same brand. All these questions remain to be solved amid the "price war" among the second-line luxury brands.